The Open Source Economy

by Ben Pearson

August 7th, 2013

Open source is usually used to refer to software that has freely accessible code for anyone to view and edit. This definition can be extended to include anything that has freely accessible design information.

The notion of open source has been best accepted by the software development industry. Things like Linux, Android, and Audacity are just a few of the countless examples of successful open source projects. The internet has been an incredibly useful tool in the open source development process, and it seems that the movement of distributed manufacturing and design brought to us by increasing access to 3d printing technology could move the world of product development and design towards open source. Projects like Open Source Ecology, OScar, and the RepRap project are all examples of open source design and manufacturing.

Open source projects tend to have a few specific features. The first is the diversity that almost always exists with people from a wide variety of backgrounds and expertise participating in the project. The people involved often range anywhere from professionals in their field to amateurs, and the community consists of people at all levels of involvement from full-time to casual participants. The low investment needed to get involved in open source projects allows everyone to participate only as much as they would like.

Open source projects also tend to develop in a modular, non-hierarchical fashion. Typically, the different parts of complex designs are designed by individuals or small groups that only have limited involvement with people working on other parts of the design. This essentially forces everyone to design in a modular fashion to ensure that their own portion can easily be added to the larger project.

I can hear one of my professors, who has a long history in business, saying “Follow the money!” so it is important for sustainable business models to arise out of the open source movement in order for it to have continued success. Already companies are making profits from open source ventures through distribution and support services for their own free, open source products. Companies can also take open source products, and add their own improvements in order to provide incentive for people to purchase products from them. Finally, just because someone can get something doesn’t necessarily mean they know how to implement it, so there is always the potential for providing additional support services to people who use your product.

The conventional industrial business model is going to meet increasing levels of challenges as open source becomes more widely used. It will be hard for companies relying on proprietary designs to compete with those that have access to free, open-source designs. The companies that survive the emergence of this new business model will be those that learn to leverage the power of a decentralized community in order to create greater success for their own company. Ultimately, the community and the company need to be partners, each working to their own abilities for one common goal, and companies that try to compete with this will likely face growing adversity.